UK a nation of renters?

More homeowners in the UK are looking to rent their homes in a phenomenon called the 'generation rent', according to a report by Savills and UK property portal Rightmove.

As of end-2011, the total value of properties in the UK's private rented sector climbed to £840 billion (S$1.69 billion), up 42 percent in only five years, while the number of private rented households climbed to 4.8 million from 3.4 million five years ago.

"As such, private renting now accounts for just under one fifth of the total value of the housing stock of the UK," said the report.

The report added, "We estimate that Britons paid a total £48 billion (S$96.46 billion) in rent to private individuals and institutions in 2011 and forecast that this will rise to £70 billion (S$140.7 billion) within five years as rents and the amount of renting rises."

However, the market is still vulnerable as it faces challenges to acquire £200 billion (S$96.4 billion) worth of investments in the next five years in response to the huge demand for private renting.

"But constrained levels of buy to let lending and house building raise issues over the ability to meet this demand. We forecast that only £50 billion (S$100.5 billion) will come from buy to let mortgages," it noted.

Due to the mismatch in supply and demand, rents have climbed significantly at an average of 5.2 percent nationally.

Looking ahead, the report said there is little sign of a slowdown in the near future as far as rentals in Britain are concerned. Related Stories:Asians look to Liverpool property investments